ASHOKKUMAR CHANDULAL PATEL,AHMEDABAD vs. ITO WARD 7(2)(1), AHMEDABAD, AHMEDABAD

ITA 2603/AHD/2026Status: HeardITAT Ahmedabad28 September 2026AY 2021-20226 pages
AI SummaryAllowed

What were the facts?

The assessee, Ashokkumar Chandulal Patel, is appealing against orders from the Addl/Joint Commissioner of Income Tax (Appeals)-9, Mumbai, for Assessment Years 2020-21 and 2021-22. The assessee, an employee of Bharat Sanchar Nigam Limited (BSNL), opted for the BSNL VRS-2019 scheme. He received Rs. 8,29,920/- as the first installment in March 2020, claiming an exemption of Rs. 5,00,000/- under Section 10(10C). The remaining compensation of Rs. 18,21,583/- was received in Financial Year 2020-21 (AY 2021-22) and offered to tax without claiming any exemption under Section 10(10B). Subsequently, the assessee learned that compensation under the BSNL VRS-2019 was held to be fully exempt under Section 10(10B) by various ITAT benches and sought this exemption in appeal.

What did the Tribunal hold?

The Tribunal held that the compensation received under the BSNL VRS-2019 scheme is eligible for exemption under Section 10(10B) of the Income Tax Act, 1961. The Tribunal noted that various Benches of the ITAT have consistently held that the failure to make a claim in the original return was due to a lack of awareness of the legal provision. The Tribunal found that the precedents cited by the CIT(A), namely Chandra Ranganathan vs. CIT and CIT vs. Koodathil Kallyatan Ambujakshan, were not applicable as they dealt with Section 10(10C) and did not have occasion to deal with Section 10(10B). The Tribunal respectfully followed the decisions of Co-ordinate Benches, including its own Ahmedabad Bench decisions, which allowed exemption under Section 10(10B) for compensation received under the same BSNL VRS-2019 scheme, even when the claim was not made in the original return. The Tribunal directed the Assessing Officer to allow the assessee's claim for exemption of the entire amount received as compensation under the BSNL VRS-2019 for AYs 2020-21 and 2021-22. No issue was expressly left undecided.

What were the issues?

1. Whether the compensation received under the BSNL VRS-2019 scheme is eligible for exemption under Section 10(10B) of the Income Tax Act, 1961, despite the claim not being made in the original return of income. Assessee's contentions: The assessee argued that the compensation received under the BSNL VRS-2019 scheme fully satisfies the conditions prescribed under Rule 2BA and is eligible for exemption under Section 10(10B). The assessee relied on multiple ITAT decisions, including Harish Kumar vs. ITO (ITA No. 42/CHD/2025) and decisions from the Ahmedabad Bench (e.g., Jayesh Tulsidas Sutaria v. ITO ITA Nos. 2387 & 2388/Ahd/2025), which held similar compensation as fully exempt. The failure to claim exemption in the original return was due to a lack of awareness of the legal provisions. Revenue's contentions: The judgment does not record specific arguments made by the Revenue. However, the CIT(A) held that claims for exemption under Section 10(10B) could not be entertained as Voluntary Retirement Schemes are contractual and distinct from retrenchment. The CIT(A) also cited Chandra Ranganathan vs. CIT [2003] 261 ITR 514 (SC) and CIT vs. Koodathil Kallyatan Ambujakshan (Bombay High Court) as contrary precedents.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 10(10C),Section 250,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH

Before: DR. BRR Kumar & Shri Tapas Ram Misra

For Appellant: Shri Khushboo Shah, A.R
For Respondent: Ms. Kalpana Singh, Sr. D.R

PER TAPAS RAM MISRA, JUDICIAL MEMBER:

The captioned appeals relate to the same assessee and are against separate orders passed by the Ld. Addl/Joint Commissioner of Income Tax (Appeals)-9, Mumbai, (hereinafter referred to as “CIT(A)”), both dated 21.02.2026 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) relating to Assessment Years (A.Ys.) 2020-21 & 2021-22 respectively. Since common issue is involved in both these appeals for the sake of convenience the same are disposed of by this common order.

2.

ITA No. 2602/Ahd/2026 is taken as the lead case. The assessee has raised the following Gr

The order continues below.

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